Autumn statement – energy & the environment

Following yesterday’s announcements – the NIA have released a schedule of the main points raised, relating to energy efficiency:

As well as higher wages and pensions, and lower taxes, the government is implementing a package of measures to reduce the projected cost of green policies on the average annual household energy bill by £30 from 2017. The bulk of these savings will come from reforms to the current Energy Company Obligation (ECO) scheme.
This will be replaced from April 2017 with a new cheaper domestic energy efficiency supplier obligation which will run for 5 years. The new scheme will upgrade the energy efficiency of over 200,000 homes per year, saving those homes up to £300 off their annual energy bill, tackling the root cause of fuel poverty and delivering on the government’s commitment to help 1 million more homes this Parliament.

The government will provide £295 million over 5 years to improve the energy efficiency of schools, hospitals and other public sector buildings. Separately, over £300 million of funding for up to 200 heat networks will generate enough heat to support the equivalent of over 400,000 homes and leverage up to £2 billion of private capital investment.

Domestic energy efficiency supplier obligation – The government will implement a domestic energy efficiency suppler obligation for 5 years from April 2017, with a value of £640 million per year, rising with inflation (CPI).

The NIA have also spoken to DECC about these announcements and advise as follows:

The new £640m per year domestic energy efficiency supplier obligation represents a reduction in expenditure of around 20% compared to the cost of delivering the current ECO.

DECC still envisage that there will be a one year extension to the current ECO with some minor changes to the existing scheme from April 2017.

The fully fledged new scheme would then kick in from April 2018 for four years.

Simplifying and reducing the cost of compliance of an ECO extension and its replacement is seen as a priority which would enable more to be spent on delivering hard measures.

Gaining agreement from Treasury to a 5 year Obligation Scheme was important in providing greater clarity and longevity.

DECC will also be looking at what can be done outside the new fuel poverty focussed obligation to increase activity in the Private Rented Sector, Social Housing Sector and Able-To-Pay Market.

DECC is very keen to work with NIA in the design of the ECO extension and new obligation.

The NIA will be obtaining further details of the £295m announced for public sector buildings and briefing members further on this.